Court Ruling Opens The Door To Rejecting Many Software Patents As Being Mere 'Mental Processes'

from the nice-to-see dept

Well, this is getting interesting. Last year, when the Supreme Court ruled very narrowly in the Bilski case, without making any explicit statement (as precedent) on overall software or business model patents, many people were frustrated. Here was a situation where the Supreme Court could have drawn a much clearer map, but it declined to do so. Of course, we wondered if this would just mean that another case would have to make its way to the Supreme Court to get a clearer ruling on software patents. In effect, with Bilski, the Supreme Court basically said "this one test you use is fine, but it's not the only test." It didn't say what those other tests should be, but basically left it up to the courts to decide. However, it did reject the specific Bilski patent for being an "abstract" idea, saying that this was not patentable under Section 101 of the Patent Act.

What's been interesting is that this seems to have emboldened a few judges to apply new or different tests (with clear reasons and caselaw for why they do so)... and some of this is leading to more software patents getting rejected. In a new ruling at the Federal Circuit appeals court (CAFC), the court appears to open up a potentially broad path for rejecting all sorts of bad (mostly software) patents by deciding that the Supreme Court's Bilski ruling might not have been so narrow after all.

The specifics are pretty down in the patent law weeds, but the key thing is that the court, as the Supreme Court did in Bilski, uses Section 101 of the Patent Act to invalidate some patent claims. This gives the court pretty broad leeway in how patents can be evaluated under that section -- again by claiming that they're merely "abstract ideas," not patentable under Section 101. Most rulings on patent validity focus on obviousness, prior art or whether or not it meets the basic fundamental rules for how a patent is written. But by opening up Section 101 to wider scrutiny, the court is making it much easier for other courts to reject patent claims, and the court is suggesting that this is a reasonable approach as an alternative test under the Bilski ruling. Basically, CAFC is turning the narrow Supreme Court ruling into a much broader one, and saying to the USPTO and courts that patents on "abstract ideas," broadly defined, should be unpatentable... and then noting that many "software" ideas may be merely abstract ideas.

It seems like perhaps CAFC is getting the message that there are a ton of bad software patents out there, and using Section 101, it's just made it a lot easier for the USPTO and the courts to dump a lot of those patents. All the USPTO or courts have do now is show that the software claim is nothing more than an abstract idea. In this case, the claims in question concerned a patent from CyberSource about doing fraud prevention online by matching your transaction information to your IP address to see if that IP was an indication of potential fraud. As the court noted, there's nothing about doing such a comparison that is anything more than an abstract idea, and, in fact, you don't need a computer or anything to do this at all. It could just be done by a human being and thus, it's not patentable under Section 101. Specifically, the court is rejecting it as a mere "mental process."

It is clear that unpatentable mental processes are the subject matter of claim 3. All of claim 3’s method steps can be performed in the human mind, or by a human using a pen and paper. Claim 3 does not limit its scope to any particular fraud detection algorithm, and no algorithms are disclosed in the ’154 patent’s specification. Rather, the broad scope of claim 3 extends to essentially any method of detecting credit card fraud based on information relating past transactions to a particular “Internet address,” even methods that can be performed in the human mind

The court further clarifies the ability to reject bogus software patents by dismantling the usual attempts to make a software patent seem legit by saying it happens "on a computer." Basically, it finds that taking a "mental process" or abstract idea and merely having it happen on a computer is not patentable.

This is potentially a big deal, though you have to imagine it will be appealed. When the Bilski ruling came out, we expected another software patent question would eventually reach the Supreme Court, and this could be an interesting one if the Court decides to take it. In the meantime, though, the USPTO and district court should be on alert that they have pretty broad leeway in rejecting software patents if they're really just "mental processes" not patentable under Section 101 (even if they're done on a computer).

Re: The laugh is on Google, then, ain't it?

Not all of Motorola's patents will be software. Anything that deals with controlling the underlying phone hardware will most likely still be valid.

It'll be interesting to see how this ruling affects things. The "do XYZ, but with a computer" patents and their kind are obvious sitting ducks, but what about patents that relate to user interfaces? Or simple storage of data?

(As a developer, I'd like to see all software patents go. After all, code is simply a bunch of mathematical algorithms, and they aren't patentable.)

There are 2 claims especially at issue. One is to a method. The other is to a "computer readable medium" (aka a cd, a harddrive etc). The court does the expected thing in invalidating the method claim as directed to a mental process that takes place entirely in the mind, aka a "mental process" which the court notes is a subset of "abstract ideas".

However, in a surprising move, the court construed the claim to a CRM (cd etc. remember?) as actually being a claim to the method which the instructions supposedly on the CRM would cause a computer to do. The steps of this method were recited in the claim. The court then noted that the method was simply the same method as in the method claims and that they were going to consider the CRM claim a claim to a method for purposes of deciding 101. This right here is probably legal error.

Nevertheless, the same result may be achieved, that is, the CRM claims may be invalidated, under the Bilski abstract idea analysis even without considering the CRM claims to be claims to a method.

The chances of this case getting picked up for appeal to the en banc CAFC court or the USSC are kind of small, but I personally hope that it does get picked up. Personally I believe they should not have committed what I note above is likely legal error. Instead they should have invalidated the CRM claims under any number of other ways, possibly even using 101.

As to why this decision happened, one must remember that there are different judges on the CAFC. 9 or 10 of them to be exact atm. Some of the judges like to rule a certain way, and others like to rule a different way. The people that decided this case are a different group of judges from another group of judges that would probably try to decide this case differently and possibly even hold the CRM claims patentable.

On the other hand, pretty much all judges would probably invalidate the method claims. Although I personally do not comment on whether the claims are in fact valid or invalid, as that is a question for a court.

Re:

The comment above that the judges "that decided this case are a different group of judges from another group of judges that would probably try to decide this case differently and possibly even hold the CRM claims patentable" is more true than you could ever imagine. There is definitely a schism within the Federal Circuit - the nation's only appellate court that decides patent issues other than the Supreme Court - with the Court pretty split on patentability issues. This issue isn't over yet, by far.

Re:

Thanks for that.

A test SCOTUS might like:

Essentially, all *digital* processes and methods and all claimed machines whose novel items can be reduced to such are nothing but mental steps, which we will call a subset of "abstract ideas". Additionally, all machine claims must first have all abstract ideas removed before being judged further for patentability.

While this might go a tad too far, it would be a better rule of thumb that should lead to many fewer sw patent awards.

Re:

Re: Re:

Because the applicant/patentee defines what the invention is, he says it is a CRM, and you can't just ignore what he said. At least that's the way it has been traditionally for some hundred years. Of course, if the court wants to change that tradition as well, then they should go ahead and say so.

Re:

Yes, en banc is an unusual proceeding, but in this case it may very well rule the day given the court's opinion about claim construction (or, rather, the court's "novel" approach, which seems more outcome oriented than upholding the importantance of precedent).

Re:

"However, in a surprising move, the court construed the claim to a CRM (cd etc. remember?) as actually being a claim to the method which the instructions supposedly on the CRM would cause a computer to do." "This right here is probably legal error"

But they didn't invent a CRM. If they actually invented the CD they probably wouldn't have this problem. But the actual media used is irrelevant. If this patent was valid, it wouldn't matter if you used a CD, DVD, floppy, tape drive, punched card, or speech-to-text converter; you'd be in violation.

Since it's clear the media doesn't matter, what's left? Oh, right, the method that the instructions would cause the computer to carry out.

Let me put it this way... could I have patented "a method of storing 'It's A Wonderful Life' on DVD" if I had done so before anyone else? Of course not. I didn't invent the DVD, and the movie is unpatentable. Similarily, they didn't invent the media, and the process is unpatentable.

Re: Re:

y u no trol hardr?

Seriously though, rejecting broad and vague patents is a good thing. The less crappy patents going through the system, the better for innovation (and we can all avoid these horribly pointless patent litigation issues).

Re: Re: Re: Freetard

The Supreme Court usually likes for lower courts to work out things like definitions and standards. Once the lower court seem to have something that works SCOTUS often steps in to bless the lower court rulings. Or, if there are multiple competing and contradictory rulings the high court will step in, but usually only after there has been a fairly protracted debate at the appellate level. I see the Bilsky case as a step in that process. The Supremes used it to signal that they though CAFC was on the right track with Bilsky, but their definitions were incomplete.

The Supreme Court basically said that software patents were not legal in Gottschalk v. Benson and has let the matter rest since 1972. By remaining silent they have let the lower courts and the Patent Office experiment with software patents. Now just about everyone but the patent trolls and their attorneys recognize that software patents do not promote progress and actually hold it back more often than not.

I hope the Supreme Court blesses this CAFC ruling. And further, I hope that it signals a real evaluation of the usefulness of other types of patents and their impacts on innovation.

Re:

software patents do not promote progress and actually hold it back more often than not.

All patents hold back progress by definition. Their existence ensures that progress is hindered. Each patent license only increases the costs of subsequent products/services. Do it enough times, and the product/service is priced out of existence, until patents start to expire.

All patents by design hinder progress. This happens whether the hindering was intended or not.

Re: Re:

>>All patents hold back progress by definition.

I agree. I singled software patents out in this case because it is the low hanging fruit of the patent system. Anyone who doesn't have a vested interest in the status quo should be able to see the problems of software patents, even if they believe that other things like pharma patents and traditional hardware patents are OK. In fact, I closed my comment with "I hope the Supreme Court blesses this CAFC ruling. And further, I hope that it signals a real evaluation of the usefulness of other types of patents and their impacts on innovation."

I do think that software patents are somewhat worse than other patents. The main reason is that the speed of innovation in the software industry should be much faster than other industries, and the 17 year term of patents is way, way out of sync with the pace of innovation. I say that software development should be faster, but unfortunately patents are slowing software development to a crawl. It is hard to do any major software development that doesn't run into a thicket of bad software patents.

Another reason that software patents are a little different is because software patents tend to be so bad; as the article notes, software patents are often just documenting mental processes, and those types of patents should not be valid. Software patents seem to breed like rabbits. There is little if any research behind a lot of them; they often read like they are cranked out after a bit of armchair speculation. Examiners lack the background to evaluate software patents, and it is even easier to slip a dodgy software patent through the system than some other types.

Eliminating software patents is a good place to start, but in the long term I hope that it causes more people to raise questions about the merits of other types of patents.

Software patents

This is a really tricky one. Coming up with an unbelievably clever algorithm for, say, determining the price of an airline ticket in real time perhaps should be patentable. Yes that could be viewed as simply a mental extension, and not valuable. But coming up with a method that is an application of a set of well (what do we mean by well?) understood principles is not.
Things are worse than just software patents. There are intellectual patents, which are just ideas (I know I worked on one) which a5re algorithmic in nature but have no implementation. And then there are incredibly vroad sweeing patents, that while representing many years of hard work by the "inventor" are excessively broad. It gets worse when you have written books on a method, taught several classes, promoted the idea, and then somehow get a patent which restricts the use. Hmmmm.
The whole area is a complete mess.

Re: Software patents

Coming up with an unbelievably clever algorithm for, say, determining the price of an airline ticket in real time perhaps should be patentable. Yes that could be viewed as simply a mental extension, and not valuable.

Re: Re:

>>All patents hold back progress by definition.

Not so. The idea of a patent is that I spend a lot money to develop something real - something original that requires a research investment. I tell you exactly what I did and in 20 years you can do the same, but for the first 20 years I get to recover my research investment without competition. Thus, I'm encouraged to make progress because I can make money on my investment.

If you compare that with how the patent system is actually working. Where bogus/trivial patents are being used by patent trolls to extort money then you can see just how broken the system has become.

Re: Re: Re:

And then what happens with people who want to progress beyond your idea? They either have to wait ~20 years to do so or they have to license that patent from you. It's possible that the cost of the patent license(s) for their product/service prices that product/service out of the market. So in either case, the result is that progress is held back until the patent(s) expire. Patents, by definition, hold back progress.

The only other case to look at is the one where the patent license(s) don't price the product/service out of the market. However, the license(s) will still increase the cost of the product/service. This price hike ensures that progress is held back. Remember that progress isn't solely a better product/service/technology, but also an increase in efficiency, which includes lower costs. So the patent license(s) in even that case do indeed hold back progress.

My argument isn't that patents kill progress, but that it holds it back. Your argument is that patents provide an incentive to create. However, nearly every study I have seen (some of which include before-and-after-patent-law scenarios) show that patents are not needed as an incentive. Some have even shown that patent law decreases the incentive. So we know that patents, by definition, hold back progress, and that patents, by empirical data, has been shown to hold back progress.

Re: Re: Re: Re:

You're ignoring the possibility of research and development that wouldn't happen without the possibility of patents. That is the premise the entire system is based on. Whether patents have the net effect of holding back progress is a matter of fact, not a matter of definition. I believe that they do, but it can't be determined just by considering what a patent is.

The patent system allowing broad patents could be their undoing, you got a protection for 20 years after that people could use that same patent to claim and invalidate other patents and since they are broad and ill defined how will judges negate the validity of those patents since they were furiously validated by the legal system with tones of precedents saying they were legal at the time.

"It could just be done by a human being"

Any software could "just be done by a human being". Get any decent CPU documentation, and you will see in precise detail, for each and every instruction, a pseudocode with the exact steps followed by the hardware to execute that instruction (these manuals are serious doorstoppers; the section with these steps can go for thousands of pages). With these, you could run any assembly instruction by hand, as if you were the processor, and arrive at the same result.

Since all software is in the end translated to these simpler instructions (which are what the hardware will actually execute), you could act in place of the CPU and run any software by hand. The only thing preventing you from doing so is the sheer scale of the task; while a fast person could do around a few tens of CPU instructions per minute, a common desktop CPU can do billions of them per second.

This is obvious to anyone who has actually studied computer architecture. All software is a sequence of instructions to be followed literally. The only thing a computer can do is follow instructions literally. But a human can also follow instructions literally with "pen and paper".

Re: Re: &quot;It could just be done by a human being&quot;

Re: "It could just be done by a human being"

Could I get a patent on a method and apparatus for playing audio and stop everybody else from playing sounds?

Nope, that is what the bench found out, that the patent was broad and didn't deserve protection because it didn't specified which method it used to reach its purposes, any reasonable educated person can see that.

But if you believe broad patents should protect ideas I'm all for it, since with ideas after the patent expire you will never have to worry about a single patent on that subject ever again.

Inventors would find themselves in 50 years claiming that patents need reform to only allow patentability of the implementation so they can patent their own versions and not have their claims invalidated by past valid patents that are so broad LoL

Re: "It could just be done by a human being"

That's why the patents are not on the software but the physical process that uses the software as a tool. In this case, the process was a mental one so it got rejected. Now suppose the patent is for a vehicle stability system. Yes, you could perform the same abstract steps as the software, but you would not be able to do it fast enough to be useful. In this example the patent claimed would be a software controlled vehilcle stability system. The code is not patented but the idea of controlling vehicle stability using software would be.

So while so called software patents are obviously damaging to the tech field, simply showing that all software is a series of mental steps is not enough to convince lawyers to invalidate them.

Now in my example, there was a major change in the physical design of the car. What I mean is that it wasn't sitting there waiting to have "stability software" installed on it. Now a PC on the other hand, it's design is pretty much worked out and that design is just to run software. So I think I'd be much harder to claim that anything new had been invented. At least, not anything patent eligible.

Re: Re: Re: "It could just be done by a human being"

I'm not sure. I would guess that you wouldn't need to mention a specific algorithm. You would need to be specific in describing the idea and application, but not the implementation details. I doubt you would be able to simply get around the patent by changing the code the way you could with copyright.

It's About Time

All software patents are illegal. It has been proven that all software is an algorithm and patent law forbids the patenting of algorithms. It's about time the courts got off their lazy asses and enforced the law.

Re: It's About Time

Unfortunately, it is more complicated than that.

The algorithm bit comes from the Benson case, amongst others. In that case the court ruled that because the only useful part of the invention was the algorithm, it was unpatentable. However, unpatentable items are allowed as components of a larger patentable invention.

Re: Re: It's About Time

It isn't, though. They are simply mathematical algorithms and "laws of nature" dressed up as "methods" and "processes". The courts have a complicated RATIONALE as to why there is more substance to them, but the courts are wrong.

Re: Re: Re: It's About Time

All processes, electronic or physical are "laws of nature". Powered flight is governed by laws of nature but that doesn't mean it couldn't be patented.

You just can't patent the natural law itself, you patent the machine that uses it. Likewise, you can't patent an algorithm. The patent has to be tied to a specific machine or physical process.

I do think the courts make lots of mistakes. They struggle with the technical vocabulary and in doing so attempt to make distinctions that aren't there. I believe the above requirements should make all software used on general purpose computers unpatentable.

another biased article

The Constitution says “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”. Therefore, if an invention is useful and promotes science, it should be patentable. It’s that simple.

The recent CyberSource decision indicates that the courts have started to see through patentees' device of throwing in language to the effect of "performed using a computer" in order to make their method claims patentable. Hopefully, this decision will help to improve the quality of issued patents henceforth. Those in the anti-software-patent set should also be pleased with this ruling, which could potentially set the stage for invalidating patents on software.